IMF urges China to shift focus on inclusive growth
Print Edition
China’s focus on investment and export-led growth to power the economy may have led to rising inequality, the International Monetary Fund said yesterday, adding that the country should shift to a more inclusive growth to rebalance the economy and make it more sustainable.
“Since its reform and opening-up period, China has made remarkable strides in lifting people’s incomes and reducing absolute poverty,” the IMF said in a working paper. “However, it has come at the cost of rising inequality.”
The IMF said the inequality was rooted in China’s growth model which heavily relied on investment and exports. So there was a bias toward manufacturing where most capital stock was utilized to meet the sector’s expansion and meet increasing export demand, it said. Wages were low partly due to the abundance of labor and the eastern coast developed first for geographical reasons as it gained from trade and foreign direct investment, the paper said. This unbalanced growth strategy in turn propagated income gaps based on skills, sectors and geography.
The IMF suggested the country unveil policies to rationalize savings and boost household income in a bid to halt or minimize the rising tide of inequality in China and eased the bias toward capital and large corporations.
The policies could include more progressive taxes, raising public spending on education and health, greater and more targeted public expenditure on social protection. It also urged reforms to boost competition.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
